The Florida Office of Insurance Regulation (OIR) has approved updates to Citizens’ Personal Lines rules and forms to comply with new laws passed by Florida legislators during the December 2022 special session. The updates for rules, forms and systems are outlined below.

Underwriting Manuals Updated for Flood Insurance Requirements

Citizens has updated the Personal Lines Underwriting guidelines effective April 1, 2023, for flood insurance requirements announced in the Personal Lines Bulletin: Flood Insurance Requirements for Citizens’ New Business.

Additionally, the Renewal Eligibility rule is updated to state policies submitted through the Property Insurance Clearinghouse are only eligible for Citizens’ coverage if the premium for comparable coverage offered by an authorized insurer is more than 20% greater than Citizens’ renewal premium. The previous 36-month rule for returning clearinghouse policyholders has also been removed.

Forms Updates

Personal Lines forms updates include the following:

Applications

• The Acknowledgement of Potential Surcharge and Assessment Liability notice included with new-business applications is amended. The updates include:
  • A new requirement for the agent’s signature affirming they have explained potential surcharge and assessment liability to the applicant
  • An updated Policyholder Assessment Example that illustrates the potential assessment obligation of a Citizens policyholder compared to a policyholder insured by a private insurer. This updated example is also amended in the Acknowledgement of Potential Surcharge and Assessment Liability form, or ACK-1, that is included with renewals
• Eligibility Statements are revised to indicate that to be eligible for coverage with Citizens, the premium for all offers of coverage made by authorized insurers has to be more than 20% greater than the premium for comparable coverage.
• All Personal Lines Declarations are updated with:
  • A new assessment statement
  • Revised flood insurance statements to encourage policyholders to purchase flood insurance
  • A new statement about mandatory flood insurance requirements for property located within the Special Flood Hazard Area defined by the Federal Emergency Management Agency (FEMA)

Note: The change applies to new policies effective on or after April 1, 2023, and for the renewal of all existing policies on or after May 1, 2023.

• The Policyholder Affirmation Regarding Flood Insurance (i.e., flood affidavit form, CIT FW 01 04 23) is updated to advise applicants and existing policyholders with property located within the Special Flood Hazard Area that Florida law requires the policyholder to secure and maintain flood insurance for their property from an insurer other than Citizens as a condition of coverage with Citizens.
  • The policyholder/applicant is required to sign the affidavit.
  • The policyholder is required, at renewal with in-force business, to sign, complete and return the form until the flood affidavit has been executed in all in-force policies.
  • The flood affidavit additionally provides statutory timelines and geographical information regarding when and where flood policies must be secured by policyholders and applicants as a condition of coverage with Citizens. The statutory time frames and the notification within the form eventually lead to all policyholders securing and maintaining flood insurance as a condition of eligibility by the end of year 2027.

Note: The change applies to new policies effective on or after April 1, 2023, and for the renewal of all existing policies on or after July 1, 2023.

PolicyCenter® Updates

All Personal Lines new-business applications effective on or after April 1, 2023, and renewal policies effective on or after July 1, 2023, will display changes for the mandatory flood insurance requirements on the Flood Details section of the Property Address Info screen:

• For the question Is there a Flood Policy in effect?, the allowable options are No, Yes or Applied For.
• When this field is edited for an existing policy, the previously selected drop-down options will continue to display until the selection is changed to one of the current three options and the policy change is bound.

The following required documents are added to new policies effective on or after April 1, 2023, and renewal policies effective on or after July 1, 2023, when the property is located in a Special Flood Hazard Area and wind coverage is included:

• Policyholder Affirmation Regarding Flood Insurance (CIT FW 01 04 23)
• Proof of Flood Coverage
• Proof of Flood Zone

Note: The Proof of Flood Zone is required only when an agent changes the FEMA Flood Zone value on the Property Address Info screen.

The following cancellation, declination and nonrenewal reasons are now active in PolicyCenter for policies required to submit proof of flood coverage and/or a completed flood affirmation form:

• Policy is required to carry sufficient flood coverage.
• A substantial Change in Risk – Policy is required to carry sufficient flood coverage.
• Flood Affirmation form has not been provided.

Proof of flood insurance can be satisfied with one of the following documents:

• If an application for flood coverage is pending, a copy of the submitted application and proof of payment as initial proof of compliance
• A copy of the flood policy declarations
• A Condominium Association master flood policy that provides building coverage for the condo unit, which may be submitted. A copy of a separate flood policy covering the unit-owner's contents will also be required if there is coverage C on the Citizens policy
• For Citizens Wind-Only policies: proof that the customer has a flood endorsement that meets the minimum standard on their underlying multiperil policy

Resources

The Assessments page on the Public website includes details about potential assessments for Citizens’ policyholders and a True Cost Calculator for consumers to compare the results of assessments applied to Citizens’ and private carrier premiums. Select Insurance > Insurance 101 > Assessments.

Log in to the Agents site to access the updated forms and underwriting manuals. Select Personal > PR-M or PR-W, and then:

• Select the policy type on the left to access the Underwriting Guidelines. Refer to Rule 202. Eligibility – Underwriting, Flood Insurance Requirements.
• Look under General for the Policyholder Affirmation Regarding Flood Insurance (CIT FW01) Edition 4.01.23.
• Select FAQs on the top menu, and enter +assessments or +flood in the Search field.